Legislature(2021 - 2022)ADAMS 519
04/12/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Port of Alaska | |
| SB9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | SB 9 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 12, 2022
1:31 p.m.
1:31:00 PM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 1:31 p.m.
MEMBERS PRESENT
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen (via teleconference)
Representative Steve Thompson (via teleconference)
Representative Adam Wool
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
ALSO PRESENT
Senator Peter Micciche, Sponsor.
PRESENT VIA TELECONFERENCE
David Bronson, Mayor, Municipality of Anchorage; Ross
Risvold, Deputy Chief Operating Officer, Municipality of
Anchorage; David Ames, Jacobs Engineering, Anchorage.
SUMMARY
CSSB 9(FIN) 9
ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
CSSB 9(FIN) was HEARD and HELD in committee for
further consideration.
PRESENTATION: PORT OF ALASKA
Co-Chair Merrick reviewed the agenda for the afternoon.
^PRESENTATION: PORT OF ALASKA
1:31:42 PM
Co-Chair Merrick invited the testifiers to begin.
1:31:59 PM
DAVID BRONSON, MAYOR, MUNICIPALITY OF ANCHORAGE (via
teleconference), thanked the committee for the opportunity
to present the project. The municipality was asking for
$600,000 from the State of Alaska. He introduced the
PowerPoint presentation: "Port of Alaska Modernization
Program Plan of Finance."
1:32:49 PM
Co-Chair Merrick indicated Representative Wool joined the
meeting.
ROSS RISVOLD, DEPUTY CHIEF OPERATING OFFICER, MUNICIPALITY
OF ANCHORAGE (via teleconference), thanked the committee
for the opportunity to come back to provide additional
details on the Port of Alaska. He began with slide 3:
"Table of Contents":
• PAMP Cost By Phase
• PAMP Sources of Funds
• Phase II B - Cargo Docks Replacement
Total Cost
Source of Funds in Order of Cost
Source of Funds Proposed
SOA & Federal Contribution Scenario
State of Alaska Contribution Scenario
Municipality Funding Scenario
• PAMP Municipality Funding Scenario
• 2022 Funding Request Summary
Phase II B - Cargo Docks Replacement
Questions & Answers
Mr. Risvold reviewed the cost of the Port of Alaska
Modernization Program (PAMP) by phase on slide 4. The total
cost of the program was $1.8 billion. He explained that the
main element he would be focusing the presentation on was
Phase II B, which was the cargo dock replacement project.
The total cost of the cargo dock replacement was $1.1
billion.
Mr. Risvold turned to slide 5 to discuss the funding
sources for the project. He relayed that the municipality
was aggressively pursuing earmarks with Alaska's
Congressional Delegation. Other funding sources included
the Infrastructure Investment and Jobs Act (IIJA), the
federal Rebuilding American Infrastructure with
Sustainability and Equity (RAISE) grants, and federal Port
Infrastructure Development (PIDP) grants. The municipality
was also seeking out port revenue bonds as a funding
source.
H
Mr. Risvold discussed the total cost of Phase II B on slide
6. He would be focusing on the details of the $1.1 billion
required to fund the project. It was projected to cost $643
million to replace cargo dock 1 and $460 million to replace
cargo dock 2, totaling $1.1 billion. The municipality was
requesting $600 million from the state.
1:37:42 PM
Mr. Risvold moved to slide 7 to discuss the proposed source
of funds for the cargo dock replacement project. To
supplement the $600 million requested from the state, the
project would be supplemented by $222 million from
municipality funds and $281 million from federal funds.
Mr. Risvold continued to slide 8 to continue discussing the
proposed funding sources. The municipality would not sell
debt until it needed the money; however it already had
authorization from the assembly which he thought was
important to note.
Co-Chair Merrick indicated Representative Edgmon had joined
the meeting in the room and Representative Rasmussen had
joined the meeting online.
1:39:44 PM
Mr. Risvold advanced to slide 9 to discuss what would
happen to tariffs in specific hypothetical scenarios. The
first scenario assumed that state and federal funding would
contribute to the project. He indicated that the tariff was
currently $3.30 per ton. The tariff would increase by $4.53
to a total of $7.83 per ton in the scenario on the slide.
He thought the important thing to remember was that tariffs
were applied and charged as the tonnage crossed a dock.
Everything that crossed the dock was subject to a tariff
regardless of its final destination. It was difficult to
quantify the tariff impact of any given item.
Mr. Risvold looked at another funding scenario on slide 10.
The scenario assumed the State of Alaska would be the sole
financial contributor to the project. The scenario
reflected the state's contribution of $600 million. No
further state or federal grants were assumed, and the
municipality would have to borrow $503 million to fund the
project. It resulted in a net increase of $9.52 per ton
which would mean the tariff would almost triple in price.
Mr. Risvold looked at another funding scenario on slide 11.
The scenario assumed only the municipality would contribute
to the project funding. The municipality would have to
borrow $1.1 billion to fund the project. The tariff would
increase by $20.18 and result in a tariff cost of $23.48
per ton. He relayed that this would be a 6.1 percent
increase. The tonnage numbers were based on the tonnage
that crossed the port in 2021.
1:43:28 PM
Representative Wool pointed to the current tariff of $3.30
and new tariff cost of $23.48 if the scenario on slide 11
occurred. He thought the percentage was incorrectly stated
and that it was about a 7 percent increase.
Mr. Risvold responded that he had taken the difference
between the new cost and the old cost. It reflected the
increase over the $3.30 tariff.
1:46:04 PM
Mr. Risvold continued to slide 12 which looked at a
scenario where the municipality funded the entire PAMP
program and not just the dock replacement project. He
reiterated that the total cost of the project was $1.8
billion, which meant that the municipality would need to
borrow $1.6 billion to cover the difference. The tariff
cost per ton would increase to $33.05.
Mr. Risvold reviewed a summary of the municipality's
funding request to the State of Alaska on slide 13. He
explained that the Municipality of Anchorage owned the Port
of Alaska and had an obligation to maintain the port. He
felt comfortable in asking the state to support the
project. The municipality would continue to pursue
additional funding for the project. It was necessary for
the municipality to have funds identified for the whole
project prior to the start of the project since both docks
would be built as one continuous dock. He thanked the
committee for its time.
1:50:41 PM
Co-Chair Merrick asked if it was possible for the state to
set aside $300 million in the current year and $300 million
in the following year for the project.
Mr. Risvold replied that it was urgent to secure all of the
funds for the port as quickly as possible. There were a
couple of evaluations by Jacobs Engineering that might
allow the project to move ahead faster than anticipated
depending on certain characteristics of the final design.
Mayor Bronson interjected that two tranches of $300 million
each would be acceptable rather than not receiving any
funding. Securing funds as soon as possible would create
security for the project.
Mr. Risvold would be grateful for any funding.
Co-Chair Merrick wondered how much of an increase the
consumer would experience if there was a significant tariff
increase.
Mr. Risvold responded that it was very difficult to
quantify the impact of an increased tariff. He reiterated
that the tariff was a per ton charge of all items that
crossed the port. He did not think he could control what
the users would do with the increased tariff. At this
point, an attempt to quantify the impact would be mere
speculation.
1:54:49 PM
Representative Josephson mentioned the Knik Arm Bridge and
the monies that were occupying debt service space. He asked
whether he was correct that the space would be otherwise
unused since the project was not going forward. He was
trying to figure out a way of packaging the project in a
way that would find support. He recalled the state
authorizing the Knik Arm Bridge through the bonding
authority, but the project was not happening.
Mr. Risvold recalled something about some funds being
appropriated for the Knik Arm Bridge. However, those funds
were unrelated to the Port of Alaska. If the funds were
appropriated for the bridge but the project was no longer
feasible, the money would be made available again and would
return to the possession of the state. The Knik Arm Bridge
was a totally separate project from the port.
Representative Josephson thought it was an important avenue
to examine.
1:56:50 PM
Representative LeBon inquired about the engineering design
and construction. He wondered if the construction contract
had been developed prior to the completion of the
engineering and design. He asked if sole source
construction was being considered.
DAVID AMES, JACOBS ENGINEERING, ANCHORAGE (via
teleconference), relayed that the current design would be a
competitive construction bid. The municipality was not
considering sole source construction but was considering
contracting strategies. It was expected to be a competitive
process regardless of the bid type.
Representative LeBon asked how far along the design portion
was. He asked about the timeline of the design.
Mr. Ames responded that the design phase was in the
conceptual stage. Completion of the conceptual stage would
take the project to about 15 percent complete by summer of
2022. The preliminary stage was projected to be complete by
the end of 2022. The preliminary design was being done by
Jacobs Engineering and services would be bid out once the
preliminary portion was complete. The project design would
be at 100 percent roughly by the end of 2023, at which
point construction proposals would be solicited.
1:59:54 PM
Representative Johnson was trying to get a sense of how
much of the project was a replacement and how much was an
expansion.
Mr. Ames replied that the current plan was to design a
replacement similar to the current structures already in
place. There would be potential for expansion in efficiency
increases due to advancements in technology and tools.
Representative Johnson asked if the potential expansion was
factored into the design costs.
Mr. Ames responded that in terms of terminal 2 of the dock,
there would be a capability to expand. He explained that
terminal 2 was a roll-on/roll-off operation and the
intention was to expand it to a more advanced operation in
the future if necessary. The docks would be built with the
ability to expand, but there was no current plan to expand
apart from efficiency increases.
Representative Johnson wondered how long it would take to
sell the bonds that the municipality already had under the
current bond authorization.
Mr. Risvold replied that the most important feature about
the revenue bonds was the ability to go to the assembly and
request revenue bonds when the cash was needed. The
authorization to sell the bonds would mean that the budget
would provide a committed source of funds. There was no
timing requirement as to when the municipality was to sell
the bonds. The concept was that the municipality needed
sources of funds committed to the projects.
2:05:06 PM
Representative Johnson suggested that the municipality
already had authorization for about $180 million.
Mr. Risvold agreed.
Representative Johnson asked whether the municipality would
have to go to the assembly to get the additional $40
million.
Mr. Risvold asked if Representative Johnson was referring
to a certain page of the presentation.
Mayor Bronson suggested looking at page 8.
Mr. Risvold advised the same.
Representative Johnson had seen somewhere that $180 million
had already been authorized.
Mr. Risvold suggested $182 million had been authorized. He
pointed to page 8 of the presentation under the category
"Municipality Funding" which listed a short-term borrowing
program that authorized $40 million. There were also
revenue bonds that authorized $182 million that had not yet
been issued.
Representative Johnson asked if the municipality had
bonding authority for the total amount for municipal
funding.
Mr. Risvold responded that the municipality had full
authorization for $222 million under the municipality
funding category. It had received some of the money already
because the municipality sold some bonds in 2020. Any
additional funds would need to be sought out by going to
the assembly and seeking additional authorization.
Representative Johnson asked how long the process usually
took. She was trying to understand the timeline.
Mr. Risvold explained that it would take about four to five
weeks to go through the assembly process. He explained the
steps to achieve further authorization.
Representative Johnson was trying to understand why he was
asking the state to fund the process prior to receiving
further authorization from the assembly.
Mr. Risvold referred back to page 8. The municipality had
authorization of $222 million of funds in hand and was
requesting $600 million from the state. The difference
between the two amounts and the total cost of the cargo
dock replacement project was $281 million. The municipality
was doing everything it could to get the remaining $281
million of funding. He pointed to the footnote at the
bottom of slide 8 that stated that in the absence of any
state or federal grant funding, the municipality was going
to ask the assembly for additional revenue bond debt
issuing authority. If the assembly were to authorize the
$281 million, it would not preclude the municipality from
receiving further federal grants. If the municipality
received a substantial grant, it could reduce the amount of
money it needed to borrow. Another important feature was
that just because the municipality had the authority to
sell revenue bonds, it did not mean it had to sell the
bonds if further grant funding was provided.
2:10:58 PM
Representative Johnson thought that none of the money would
go back to the state. She asked how the Port of Alaska was
the only tsunami-proof port in Alaska. She wondered whether
Port Mackenzie could qualify.
Mr. Ames responded that the Port of Alaska was the only
tsunami-proof general cargo port in the state. He indicated
that Port Mackenzie was an older port and was not equipped
to support general cargo or containers.
Representative Johnson suggested that Mr. Ames was saying
that the Port of Alaska was not the only tsunami-proof port
in the state.
Mr. Ames responded that it was the only tsunami-proof port
that met the food security requirements that were the
target of the project.
Representative Johnson asked Mr. Ames to provide more
details.
Mr. Ames responded that Port Mackenzie was designed to be a
bulk loading port. It did not have a flat platform that
allowed for the rapid transit of trucks and there was a
large ship loader blocking traffic to the terminal. From an
engineering perspective, it was not a general cargo loading
platform.
Representative Johnson expressed concerns about the $23
tariff and thought that people would find a loophole. She
was also concerned about providing $600 million to the
project before financing was in place.
2:16:16 PM
Representative LeBon sensed that there was an urgent need
for funding. He wondered if the funds were distributed in
two installments of $300 million over time, would the
municipality move forward assuming the state would
contribute the entire $600 million amount. He asked if the
municipality would go to the assembly and ask for the
difference in an effort to fund the project as soon as
possible.
Mayor Bronson indicated the port would be built as soon as
possible. He reported that the municipality had offers of
private equity but it would lose control of the port if it
accepted the offers. He was unsure if this would be good or
bad. The municipality had met with the congressional
delegation in an attempt to get as much money as possible.
The municipality had to move forward with the project
regardless of the funding. He relayed that the
congressional delegation thought it had become a
humanitarian crisis. The citizens of Anchorage had to have
the project in place one way or another.
2:19:19 PM
Representative Rasmussen asked Mayor Bronson if it was
possible for the municipality to cover costs considering
that 80 to 90 percent of the state benefited from the goods
that were transported through the port. She was concerned
that Anchorage would have to bond at a disproportionate
level if the state did not share as much equity in the
project. She did not want the responsibility of bond debt
to fall solely on the taxpayers of Anchorage.
Mayor Bronson responded that the tariffs represented the
part "repaid at the cash register."
Mr. Risvold added that the tariff was charged at the time
goods came across the dock and it would pay the debt
service of the bonds. The municipality was the issuer of
the debt and was doing business as the Port of Alaska. The
taxpayers would not be responsible for the debt, but the
investors would have a lean on the revenues of the port.
The municipality was required to set fees on the port to
meet a minimum debt repayment. The tariff was a surcharge
on the users, not the taxpayers.
Representative Rasmussen wondered if the state provided a
portion of unused funds to the project if it would help the
municipality. She asked if the municipality was only
looking for cash at the moment.
Mr. Risvold replied that he would be grateful for any funds
from the state. If the funds were to be distributed over a
period of two years instead of all at once, it would be
workable for the municipality. The monies for projects that
were no longer going forward, such as the Knik Arm Bridge,
would revert back to the legislature and would be
considered part of the unrestricted assets of the state.
Representative Rasmussen understood that the state could
take on debt if the legislature were to approve it. She did
not believe it would mean the funds were reappropriated,
but it would give the legislature the ability to borrow
funds from other projects.
2:24:51 PM
Representative Wool asked about the figure of $222 million
and whether it was fixed. He wondered how the $600 million
was derived. He asked if it was possible to get more than
$281 million in federal grants.
Mr. Risvold returned to slide 6. He noted that Cargo Dock I
was predicted to cost $643 million. The construction cost
was estimated at $600 million and the remaining $43 million
was designated for costs such as design and permitting. He
explained that Dock 1 would provide food security for the
state. He returned to slide 8 and explained that $222
million was in the hands of the project already. If the
additional $281 million did not materialize, the
municipality would supplement it with revenue bond
obligation.
Representative Wool asked if the funding might be more than
$281 million. He wondered if the number was achievable.
Mr. Risvold responded that the application process was yet
to be determined by the federal government. Other grant
processes happened annually, and he was confident that the
state would receive money from various annual grants. He
invited Mr. Ames to add to his comments.
Mr. Ames offered that based on the meetings in Washington
D.C., it seemed that $280 million was a reasonable target
based on past projects. It was not guaranteed, but signs
had been positive.
2:29:41 PM
Representative Wool asked if there were any other tsunami-
proof ports in the state that met food security capacity
needs.
Mayor Bronson responded that the all the infrastructure
that went with the port was already in place. The
municipality would not want to develop additional docks
because an earthquake that could destroy the Port of Alaska
could also destroy any additional docks. The concerning
threat to the dock was not tsunamis. He asked everyone to
remember that the project was a replacement and that the
only thing that had been altered was to move the dock about
an extra 140 feet into the ocean's current to accommodate
for deeper water and larger ships.
Mr. Ames commented that the mayor was correct. He suggested
that what was missing from other locations was the
infrastructure to distribute cargo. While there were a few
deep-water ports in Alaska, the docks had no way to
distribute the goods to the state. The fact that the port
was tsunami-proof was one of the many advantages of the
port's location. The primary advantage was that the port
had the infrastructure to distribute goods in Alaska.
2:33:39 PM
Representative Johnson asked if anyone had thought about
the bridges going down if there was a large earthquake. She
assumed that the municipality would be cut off from the
rest of the state if this happened. She wondered how the
$600 million would be applied to Cargo Dock 1.
Mr. Risvold returned to page 6 of the presentation. He
indicated there needed to be funding in place for both
docks in order to build them both. He reiterated that the
construction cost of Cargo Dock 1 was estimated at $600
million, and the $43 million difference would pay for
things like design and project management.
Representative Johnson was trying to tease out of Mr.
Risvold that the $600 million would pay for Cargo Dock 1
but would not pay for Cargo Dock 2. She suggested that
Cargo Dock 2 would be financed through municipal and
federal funds.
Mr. Risvold pointed to page 8. He indicated that the
municipality had already committed $222 million to the
project. There was a second request of $600 million, which
totaled $822 million. He indicated the $281 million
difference was already committed to the project. The
municipality was looking for $600 million appropriation
from the state in the form of a grant.
Representative Johnson had understood that there was $600
million for construction and $43 million for planning and
design. She thought that the $600 million would go to Cargo
Dock 1. She would like to know if she was inaccurate.
2:38:04 PM
Mr. Ames offered that most of Mr. Risvold's slides made it
clear that the municipality needed $1.1 billion committed
to the project as a whole prior to the start of
construction. He emphasized that the total request and the
total need was $1.1 billion. He did not see it as the
state's money being spent first because all monies had to
be accounted for prior the start of construction. There
would be a combination of funds going into the project.
Representative Johnson understood that Cargo Dock 1 would
be built prior to Cargo Dock 2 to ensure the port would
stay open. It appeared there were two different docks and
two different projects. She understood that it would take
four to six years to build each dock, and therefore it
would be four to six years before the second portion of the
monies would be needed. She wanted a clear picture of how
monies would be designated in each of the phases.
Mayor Bronson replied there was a construction project and
also a financing project. Nothing would get built before
having $1.1 billion in the bank dedicated to the project.
He was trying to fill the purse with federal, state, and
local money to the minimum required level before
construction could even begin.
Representative Johnson appreciated the information. She was
concerned that the state was putting itself in the first
position in the project.
Co-Chair Merrick thanked the testifiers. The committee
would take an "At Ease" until 2:50 p.m.
2:43:47 PM
AT EASE
2:52:32 PM
RECONVENED
Co-Chair Merrick indicated Representative Carpenter had
joined the meeting.
CS FOR SENATE BILL NO. 9(FIN)
"An Act relating to alcoholic beverages; relating to
the regulation of manufacturers, wholesalers, and
retailers of alcoholic beverages; relating to
licenses, endorsements, and permits involving
alcoholic beverages; relating to common carrier
approval to transport or deliver alcoholic beverages;
relating to the Alcoholic Beverage Control Board;
relating to offenses involving alcoholic beverages;
amending Rule 17(h), Alaska Rules of Minor Offense
Procedure; and providing for an effective date."
2:52:56 PM
Representative Wool MOVED to ADOPT Amendment 10, 32-
LS0124\W.13 (Dunmire, 3/30/22) (copy on file):
Page 51, lines 24-25:
Delete "four live music or entertainment permits
to a licensee in a calendar year"
Insert "one live music or entertainment permit to
a licensee in a calendar quarter"
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained that the amendment would
allow one live events per quarter to occur in a brewery,
tasting room, or distillery. The amendment would limit
events to one event per quarter rather than unlimited
events. The motivation was to put additional sidebars on
individuals in the entertainment business and manufacturers
of alcohol in order to avoid impacting the business of the
bar industry.
Representative Rasmussen thought the amendment was over-
restrictive. She would be opposing the amendment.
Representative LeBon agreed with Representative Rasmussen.
He thought it would be too restrictive and that businesses
should have the ability to schedule events as they please.
He could not imagine a concert outside in January in
Fairbanks.
Representative Wool was not trying to impose excessive
restrictions. He suggested there were seasonal rules that
applied to other businesses like fishing. He did not think
the idea was met with objection by individuals in the
alcohol manufacturing industry. He agreed that an outdoor
concert in Fairbanks in January would not make sense, but
the concert could be indoors.
Senator Micciche did not have a problem with the amendment.
He thought it was fair.
Co-Chair Merrick WITHDREW the OBJECTION.
Representative LeBon OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Lebon, Ortiz, Rasmussen, Thompson, Carpenter,
Josephson
OPPOSED: Wool, Johnson, Merrick
Representative Edgmon was absent from the vote.
The MOTION to adopt Amendment 10 FAILED (3/6).
2:59:40 PM
Representative Wool MOVED to ADOPT Amendment 19, 32-
LS0124\W.22 (Dunmire, 3/30/22) (copy on file):
Page 49, line 14:
Delete "10"
Insert "four"
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained that the amendment addressed
the number of events a nonprofit could hold to sell its own
alcohol. Current law allowed for five events per year, and
he realized that he meant to propose "five" instead of
"four."
Representative Wool MOVED to ADOPT conceptual Amendment 1
to Amendment 19.
Co-Chair Merrick clarified that conceptual Amendment 1
would change line 3 of Amendment 19 from "four" to "five."
Co-Chair Merrick OBJECTED for discussion.
Representative Wool spoke to the original amendment. He
reiterated that the current law allowed for five events but
was raised in the Senate Finance Committee in 2020 to ten
events. He wanted to reduce the number back to five. If a
nonprofit wanted to have more than five events, it would
have to get a catering permit. He explained that a catering
permit would allow there to be alcohol sold at an event
through a third party that had an alcohol license. He
reiterated that the bill proposed raising the number of
events to ten per year and the amendment would reduce it
back to five, which was what was in current law.
Co-Chair Merrick WITHDREW her OBJECTION.
There being NO further OBJECTION, conceptual Amendment 1 to
Amendment 19 was ADOPTED.
Representative Wool reviewed Amendment 19 as amended. He
thought five events per year was acceptable but ten would
be excessive.
3:06:01 PM
Representative LeBon asked Representative Wool if a
nonprofit would be responsible for liability if it
overserved alcohol to an individual at an event at a venue
like the Juneau City Museum, or would the museum be
responsible.
Representative Wool was confident that the person serving
the alcohol would be responsible. He assumed the servers at
nonprofit events would have met the requirements to serve
alcohol.
3:08:05 PM
SENATOR PETER MICCICHE, SPONSOR, indicated the venue would
not take on the liability. The nonprofit would be
responsible.
Representative LeBon asked if the nonprofit would be
required to have an insurance policy for the event.
Senator Micciche thought that liability issues that
typically arose concerning large organizations did not
usually involve alcohol. It was usually an issue of someone
falling and hurting themselves or something similar. He was
unaware of any problems in the past related to liability.
He thought liability was covered at every event, whether
alcohol was present or not.
Representative Wool responded that when he had to buy a
liquor license, he had to buy liability insurance for
"slipping and falling." He had to buy liquor liability
insurance separately, which was not simple to obtain.
3:10:48 PM
Representative Rasmussen asked if the maker of the
amendment was aware of any nonprofits that were exceeding
the ten events per year limit.
Representative Wool was unaware of anyone holding more than
five fundraising events. If they were, they were breaking
the current law.
Representative Rasmussen asked why the limit of ten events
per year was chosen.
Senator Micciche offered the example that First Friday
events would involve more than five events per year. He
clarified that no one in Alaska was required to have
liability insurance under state law for alcohol. However,
one-time alcohol liability insurance was easy to purchase,
and organizations would typically purchase this insurance
for an event.
Representative LeBon thought the nonprofit community would
want to default to a professional when alcohol was
involved. He though the amendment was reasonable.
Representative Wool provided wrap-up comments on the
amendment. He thought it was sufficient to permit five
events per year. He understood that First Friday events
also needed special event permits.
3:15:08 PM
AT EASE
3:16:56 PM
RECONVENED
Co-Chair Merrick WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 19 as amended
was ADOPTED.
3:17:15 PM
Representative Wool withdrew Amendments 3, 4, 5, 6, 7, 8,
9, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, and 24.
Co-Chair Merrick indicated the next amendment would be
Amendment 26A.
3:18:33 PM
AT EASE
3:20:22 PM
RECONVENED
Representative Carpenter MOVED to ADOPT Amendment 26A, 32-
LS0124\W.37 (Dunmire, 4/7/22) (copy on file):
Page 73, line 23:
Delete "or of"
Page 73, line 24, following "AS 04.11.150,":
Insert "an existing brewery retail license under
AS 04.09.320, an existing winery retail license
under AS 04.09.330, or an existing distillery
retail license under AS 04.09.340"
Co-Chair Merrick OBJECTED for discussion.
Representative Carpenter reviewed the amendment. The
amendment would modify the language in the bill on page 73.
The amendment would add winery, distillery, and brewery
license types into the language of the bill.
Representative Josephson provided a hypothetical scenario.
He asked if a business in an outer borough did not have a
liquor license if the license could be relocated back to
the city of origin, thereby freeing up that license for
purchase.
Senator Micciche responded that the amendment was brought
forward because someone had brought the issue to his
attention. He agreed that if a city wanted another license
to be available, but it did not quite reach the population
requirement, it could borrow population from an outer
borough to reach the required number. It would solve the
problem for cities that may eventually cap out but had a
large population in a borough that was not in the city.
3:24:44 PM
Representative Josephson asked if Senator Micciche approved
of the amendment.
Senator Micciche responded affirmatively. There may be some
potential expansion of the license allowance in another
bill. Police groups could be moved between borough and city
depending on the need.
Representative Josephson asked whether recovery groups
would think that this was a loophole around licenses for
population limits.
Senator Micciche understood the concern. However, it did
not add new licenses, it relocated licenses. The population
was already present. He noted that recovery groups were
worried about a different amendment that would have added
new licenses.
3:27:08 PM
Representative Johnson provided a scenario where a license
was transferred into a city from a borough. She asked
whether the license would remain in the city or revert back
to the borough once it was sold. She wondered if the
licenses would become indistinguishable from each other.
Senator Micciche thought members were too focused on the
population amounts. He responded that the license could
either stay in the city or move back out to the borough.
However, there would likely be room in the borough already
for another license. He spoke with a tasting room owner
earlier that day who planned to purchase a Restaurant or
Eating Place License (REPL) should the bill pass, which
would free up their current license.
Representative Johnson clarified that it would become a
whole license within the city.
Senator Micciche responded in the affirmative.
Representative Carpenter did not read anything in statute
that would prescribe that the change would be permanent.
However, he thought that in the future the leaders of
organizations might treat it as a quota.
3:30:10 PM
Representative LeBon commented that in Fairbanks, the
Fairbanks North Star Borough had about twice the population
of the city. He suggested that any business would want to
take advantage of the highest traffic flow, and there was a
steady traffic flow from the borough into the city. The
amendment would give an option for a license to be located
near or within a city if the economics and the business
opportunity made sense. He indicated that this was the
purpose of the amendment.
Senator Micciche corrected himself regarding his response
to Representative Johnson's earlier question. He indicated
that the license would actually become a license of the
city if a business moved to the city, and it would remain a
city license instead of belonging to the borough. If a
business owner wanted to move their business outside of the
city, they would apply under the borough's remaining
population cap.
Representative Johnson thought the distinction was
important. Her comments were in the service of future
business owners.
Senator Micciche also corrected the record that a Brewery
or Distillery License (BDL) could already move into a city
from a borough.
Representative Wool was going to make the same point as the
bill sponsor. He thought that a tasting room already had to
be in existence in a borough before it could be transferred
to the city. He wondered if the process would be the same
for package stores.
Senator Micciche responded that his understanding was the
opposite, and that one could apply in the borough for a
city license. A business owner had to be licensed but did
not have to be operating before applying to move a business
into the city. He added that language related to package
store relocation had been in the bill since 2016.
Representative Wool did not believe the language was in
current statute but it was in the bill. He thought that if
there was a package store in a borough, it could be
transferred into a city. Every ten years, a maximum of
three stores could be moved and would have to be approved
by the Alcohol and Beverage Control Board.
Senator Micciche responded in the affirmative. He indicated
that he wanted to appease communities that wanted more
flexibility and the ability to license their own alcohol.
Representative Wool noted that brewery could obtain a REPL
under the bill and have a new set of rules to work under.
He thought that the existing tasting room license the
brewery once operated under would then be available for
sale.
Senator Micciche responded in the affirmative. The license
would either return to the state or the business could
choose to sell it.
3:35:16 PM
Co-Chair Merrick WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 26A was
ADOPTED.
Co-Chair Merrick would have a vote and comments at a future
meeting. She reviewed the agenda for the following morning
meeting. She also set amendment deadlines for HB 220 and
HB 229 which were due by noon on Wednesday, April 29, 2022.
CSSB 9(FIN) was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:36:34 PM
The meeting was adjourned at 3:36 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Port of Anchorage HFIN PAMP Presentation 4-11-2022 .pdf |
HFIN 4/12/2022 1:30:00 PM |
|
| Port of Anchorage Support Letters.pdf |
HFIN 4/12/2022 1:30:00 PM |